Euro Zone Price Differences Disappearing: Duisenberg

By Agence France-Presse Price differences within the 12-country euro zone have already begun to disappear, six months after the single currency's introduction, says European Central Bank (ECB) Chief Wim Duisenberg. "We have only started and price differentials are already disappearing," he told a seminar in Vienna, Austria, on June 13. "The process will certainly take years and years . . . but the euro has powerfully contributed to more integration and competition, and it will continue to do so in the future." Duisenberg trumpeted "the spectacular impact" the euro has had on financial markets since its launch. "In financial markets, a single money market has been created and a deep liquid bond market has encouraged a surge in debt issuance by the corporate sector," he said. "In product markets, the euro has also had an important impact on the cross-border transparency of prices, acting as a catalyst for trade." Duisenberg also urged the European Union to continue structural reforms. "Structural reforms are not only important for economic growth, they also increase adaptability to economic shocks. Under [the European Monetary Union], members countries are unable to use . . . exchange rate policies to address country-specific shocks," he said. "Without price and wage flexibility, and mobility of production factors, economic shocks would lead to lower economic growth and higher unemployment." Copyright Agence France-Presse, 2002